SACRAMENTO — California taxpayers will be asked to spend billions of dollars to reform the state’s overcrowded and mismanaged prison system.

Before they do, however, they are spending millions to employ the federal overseers who will direct those reforms and their staffs. An Associated Press review of spending within the various federal offices guiding prison reform found that California is spending more than $10 million a year for their advice, most of which goes to salaries.

One office — the federal receiver overseeing reform of the prison’s medical system — includes five of the 10 highest paid jobs in California government, according to records.

The $500,000 annual salary of that receiver, Robert Sillen, is nearly two-and-a-half times the salary of the governor — a salary Gov. Arnold Schwarzenegger declines to accept.

The salaries and office expenses have drawn fire from state lawmakers of both major parties.

“We should not need an overpaid receiver and … exorbitantly paid staff to tell us we need to act,” said Assemblyman Todd Spitzer, R-Orange, chairman of the Select Committee on Prison Construction and Operations.

Medical treatment is just one aspect of prison operations that now fall under federal oversight.

The same judge who appointed Sillen also named a special master to investigate guard brutality and employee discipline. Other federal judges have found so many problems with the state’s juvenile justice, parole and inmate mental health programs that they, too, have appointed special masters to oversee reforms.

“I would suspect that the bill across the board gets pretty humongous,” said Michael Keating, the special master who has overseen inmate mental health services for a decade.

Those reforms are likely to trigger hundreds of millions of dollars in additional state spending. Gov. Arnold Schwarzenegger has proposed an $11 billion construction program to relieve overcrowding and improve prison medical services.

If lawmakers don’t act, he warned that federal judges could take over more of the prison system, sapping money from programs such as education and health care.

Sillen took over the Department of Corrections and Rehabilitation’s $1.5 billion medical system after U.S. District Judge Thelton Henderson found evidence of neglect and malpractice leading to an “unconscionable degree of suffering and death.”

Henderson set Sillen’s

$500,000 annual salary when he gave the former Santa Clara County public health chief unprecedented control over California’s prison health care system in April.

Sillen said management of the hospitals and pharmacies in the state’s 33 prisons is so poor that he had no choice but to set up his own health care bureaucracy.

“If you want good talent, you have to be prepared to pay for it,” Sillen said.

He ordered higher salaries not only for his own staff, but for hundreds of state medical workers. That means long-term savings because the higher pay will let the department fill numerous health care vacancies, trimming the need for expensive private medical contractors, Sillen said.

“Those salaries are whopping,” Senate Majority Leader Gloria Romero, D-Los Angeles, said about the pay to the federal staffs. “It is going to a somewhat bloated bureaucracy.”

Romero, who chairs the Senate Select Committee on California’s Correctional System, said she plans to call Henderson to complain. She thinks Sillen could use more state employees and pay his staff salaries in line with those paid to state workers, appealing to their sense of civic duty. The money saved could go to increasing services, she said.

Henderson declined to comment as a matter of policy, said his clerk, Rowena Espinosa.

Sillen said Romero is being unrealistic.

“You don’t get the talent unless you’re paying competitive salaries. That’s life in the marketplace,” Sillen said. “For anyone to think people are going to sacrifice their family’s well-being for a public-service ethic, I think they’re kidding themselves.”

Other lawmakers said state officials ultimately are at fault for letting prisons deteriorate to the point that a federal judge stepped in.

“The salaries are a byproduct of the fact that there is no accountability and control” over the receiver, said Sen. George Runner of Lancaster, the Senate’s Republican Caucus chairman. “But the receiver is there because we didn’t do our job in the first place, so it’s hard to complain.”

Budgets for the receiver and the special masters are built into the corrections department’s annual budget, said H.D. Palmer, spokesman for the governor’s Department of Finance.

“It’s not a question of whether we want to do it or not. We have to do it,” Palmer said.

The administration is working with Sillen’s office and supports bringing the state’s prisons up to constitutional standards. But Palmer said, “We want to do it in the most cost-effective manner possible.”

Thomas Flannery, the court consultant who performed a market survey before recommending Sillen’s salary in February, told Henderson that Sillen’s $450,000 salary, $50,000 annual bonus and $150,000 annual benefits package “is extremely reasonable.” He compared the position to that of a chief executive officer of a $1 billion nonprofit health care system.

Sillen’s salary falls behind only the $534,000 earned by the chief investment officer for the nation’s largest public pension fund, the California State Public Employees Retirement System. That officer controls a $223 billion investment portfolio, said Lynelle Jolley, spokeswoman for the state Department of Personnel Administration.

“Why not compare it to what the head of Kaiser makes? He makes in the millions,” Sillen said.

Jim Lott, executive vice president of the Hospital Association of Southern California, said Sillen’s salary is “a bargain” when compared to those earned by private health care administrators. The salaries paid to his top staff “would not be out of line at all,” said Lott, whose organization tracks administrators’ salaries at for-profit and nonprofit hospitals.

“You have to look at the prisons as a large health-care delivery system,” Lott said. “They’re getting him at a bargain price because he’s definitely at the low end of the range.”